KPMG, the global accounting firm, has experienced a considerable setback in its battle against liquidators of China Medical Technologies Inc, former U.S. listed healthcare firm. The firm’s executives have been issued U.S. charges regarding defrauding investors out of over USD $400 million.
China Medical is the most high-profile case in years over the production of Chinese audit work papers. Moreover, at one point, it threatened to leave U.S.-listed Chinese firms in danger of delisting and unaudited.
According to sources, last week the high court in Hong Kong rejected a procedural request from KPMG which would limit the time in which China Medical liquidators can pursue claims against KPMG for damages and losses for the audits of a now-defunct company.
In addition, the ruling makes way for proceedings on a contempt summons brought against a total of 91 partners and former partners of KPMG issued in November 2017 for refusing to abide by a High Court order to produce China Medical’s audit work papers.